What to Check Before Investing in a New-Build Development

Corporate structure. How is the developer legally structured? In most European countries, a new-build project is placed in a separate project company. Verify in the KvK register (or local equivalent) who the ultimate beneficiaries are and whether the parent company provides additional guarantee.

Solvency and credit history. Request annual accounts for the last three years. For new-build, solvency of at least 15–20% is customary. For project companies, look at parent company equity.

Pending disputes. In the Netherlands: check rechtspraak.nl for current or recent proceedings against the developer. Other EU countries offer comparable transparency via national case-law databases.

3. Financing structure

Construction financing. Which bank or financier has committed construction financing? An unconditional financing commitment is a strong indicator. With conditional financing, e.g. subject to 70% pre-sales, the project is only certain once that threshold is met.

Pre-sales percentage. In the Netherlands, pre-sales of 70% to 80% is customary before construction starts. In Southern Europe this varies; in parts of Spain, construction sometimes starts at 50%. Too low a percentage signals risk of stalling mid-build.

SWK / GIW guarantee. In the Netherlands, the Stichting Waarborgfonds Koopwoningen (SWK) or the Garantie Instituut Woningbouw (GIW) provides a guarantee against developer bankruptcy. Verify whether the project falls under such a guarantee, it typically covers between 5% and 10% of the construction sum for completion in case of bankruptcy.

In Spain, a comparable mandatory guarantee exists (Ley 38/1999); in Portugal, the garantia bancária on prepaid instalments.

4. Legal documents

Construction and purchase agreement. The difference: the construction agreement governs the build, the purchase agreement governs the land transfer. In a 'koop-aanneem' (purchase-construction) construction, both are bundled. Verify that:

• the delivery date is firm and not "indicative"
• the penalty clause for delay is realistic
• additional work is transparently regulated
• the property is exactly defined, including drawings, materials list and finish specification

Deed of division and HOA bylaws. For apartments: request the draft division deed and HOA bylaws. Imbalanced voting ratios or under-funded major-maintenance reserves are direct red flags.

Easements and chain conditions. Sometimes restrictive rights apply to the land, e.g. an obligation to use specific facade materials, or a ban on short-term rentals.

5. Technical documents

Building decree / EPBD compliance. The project must comply with the Bouwbesluit 2012 (replaced in 2025 by Bouwbesluit 2025, with tightened energy requirements). In other EU countries, the EPBD directive is leading.

Energy label A or better. For new-build from 2025, energy label A is standard; from 2027, label A+ becomes mandatory in most member states for new-build.

MPG and environmental performance. The Environmental Performance of Buildings (MPG score) has been tested more strictly in the Netherlands since 2025. For commercial real estate in other member states, comparable LEED or BREEAM requirements apply.

6. Delivery

Delivery documentation. At delivery the developer must provide: revision drawings, use and maintenance manuals, supplier guarantee documents, and the delivery report. A VvE Adviseur is often engaged for independent review.

5% retention. In the Netherlands, the buyer may retain 5% of the construction sum for up to three months after delivery, to cover any defects. This is a statutory right under Article 7:768 BW.

Checklist summary

This checklist is informational and not exhaustive. Always engage an independent notary or lawyer to review purchase contracts and guarantee structures. Tax and legal details vary widely by country and project.

Sources: NVB Bouwondernemers · NEPROM · SWK Waarborgfonds · Bouwbesluit / wetten.overheid.nl · EU EPBD directive · RICS